COVID-19 Leads to Rise in Young Entrepreneurs by Sophie Bunn
In a climate where everyone is encouraged to stay home and not socialize, Gisele Sampayo, a sophomore at the University of Texas at Austin, found herself with an abundance of free time and a feeling of isolation pushing her to do something different. She started an online fashion company called Split Shirt from her bedroom and has since grown it into a prospering entrepreneurial business.
“I started Split Shirt after my sister and I started taking button down shirts and realizing we loved upcycling and giving clothes a new life,” Sampayo said. “We’ve had a lot of time because people are on their phones, they’re online shopping, and even school is virtual now. We saw a demand and the organic growth even during this time has been amazing.”
Since the beginning of COVID-19, the number of active business owners in the United States dropped by 22% between the months of February to April 2020 according to the National Bureau of Economic Research. In May and June the numbers dropped to 15% and 8% respectively. However, the rise of social media usage during the pandemic has led to an increase of virtual companies and the rise of young entrepreneurship.
According to a study conducted by GlobalWebIndex, Internet users in the U.S. and U.K. revealed a 55% increase in people sharing on social media since the pandemic began. On platforms such as Instagram and Tik Tok, students and young people use their digital presence to market and advertise their small companies.
“I would argue that we have always had a culture of young people starting their own businesses and becoming entrepreneurs super young,” UT business professor Christopher Meakin said. “But, in the world of a pandemic the young-person creativity that usually has more of a lid on it is leaking out into social media.”
UT business professor Leigh McAlister said that the point of starting a business is to solve a customer problem.
“COVID itself has created a lot of problems,” McAlister said. “So, in that sense it creates a lot of opportunity for entrepreneurs.”
Sampayo created Split Shirt as an up-cycled fashion brand that puts heavy significance on sustainable fashion. Though her business has been growing in popularity, she says that COVID-19 has created issues because her work depends on second-hand clothing and people are less willing to use other people’s things or buy used clothes.
“We have had to figure out ways to ensure that our products are clean and are handled properly,” Sampayo stated. “We do two washes for the clothing, and we will fix anything that has significant flaws. We don’t want to make it seem second-hand.”
Split Shirt was created to make stylish, sustainable clothing for all shapes and sizes. Sampayo said that research projects in her sustainability classes helped inspire her to create a company centered around up-cycling and sustainable shopping. Each shirt is made with second hand button up shirts that Sampayo and her sister sew together.
“We quickly discovered that the button up shirt is so versatile because everyone can wear one so the demographic is very wide and the button down is such a sustainable garment,” Sampayo said. “I had to learn how to sew at one point because my sister couldn't do it all, but it’s worth it.”
Sampayo said that without the pandemic, she would have never created the Split Shirt Company, and has called the pandemic a “blessing in disguise” for herself and her dreams. Since then she said she has learned so much about business in ways that school could not have taught her.
“I’ve had to be my own CEO, CFO, supply chain manager, marketing manager and I’ve had to learn how to create a website. These are all things I didn’t know how to do before this company,” Sampayo said. “The best thing I’ve learned about entrepreneurship is that you can learn anything on Google. You can apply what you’ve learned in classes too, but you can learn anything you don’t know how to do.”
Another UT student created a sustainable resale company called Rethread ATX in January of 2020 and, because they were also based off of Instagram, they had the ability to keep their business afloat during this time. Since its beginning, the founders of Rethread have learned to market themselves in a way that makes it easier for people to shop sustainably during a time when people don’t want to go to stores.
“We want our customers to know that we are that mediator making things safer and more convenient for people, especially right now,” said Co-Owner and Co-Founder of Rethread ATX Kassidy Litchenburg. “We do that part of wearing masks and gloves while in stores and let people shop safely from home.”
Meakin argued that small businesses have more adaptability than larger businesses and corporations during this time to be able to transfer online and change models without much pushback. However, he says small businesses don’t have the capital or depth to weather things if they can’t make changes.
“I don’t think you can generalize new ventures,” Meakin said. “You’d think the airlines would all be broke by now, which I’m sure some are struggling, but they’re still flying airplanes. But with most small businesses, changing and adapting models and systems is a lot easier. They don’t have the cushion of corporations, but they have the mobility.”
Sampayo said the pandemic has helped her company because she does not have to open up a store front and they are able to market online without making huge investments. She said that businesses born in the pandemic are easier equipped to be successful in the long run.
“I think that during the pandemic since everyone is on their phones I have seen the fashion industry take off in different directions,” Sampayo said. “There is a trend of sustainable fashion popping up on places like Tik Tok, leading to a lot of businesses like ours being created.”
McAlister said that the pandemic has created a surge of technology usage that has been experienced by all generations. She said that it is not just younger people now who are the majority of social media users, leading to an increase of business online.
“Things Granny wouldn't have had before she will have now,” McAlister said. “Younger people would’ve had it anyway, but now there’s a bigger push for all generations including granny to get over the technology hurdle. This of course inspires new business.”
Litchenburg said young entrepreneurship helps people be creative and focus on other things other than the current climate of the world. She said she has definitely seen a significant rise of creativity as a whole come from her generation.
“We have a good friend down the hall who has started a T-shirt company, we have friends who have also created a sustainable streetwear company, and another friend who is getting on his feet with his band,” Litchenburg said. “It’s just amazing that young people already have this advantage with the Internet and social media and now they’re being able to use it in the perfect way at a time where it is the most important connector.”
As for Split Shirt, Sampayo hopes her company continues to be successful even after the pandemic as well as being hopeful for the future of young entrepreneurship as a whole.
“I think this can be a successful company in the long run because of the uniqueness of our style and the ability to be completely virtual, but there are still a lot of things I have to learn,” Sampayo said. “I do hope to take it somewhere I just don’t know how long it will take. I think this goes for most of these companies that students start for fun during the pandemic. It might have been something that started to just pass time, but if these young people want to continue it I think they definitely can and hope they do.”
Both Meakin and McAlister say that this trend of student business and young entrepreneurship is not something unique to the pandemic, but that it has harnessed the younger generation’s power of social media to create successful businesses for them.
“If the past is any predictor, we can’t keep these kids down,” Meakin said. “The pandemic may put an exclamation point on the end, but the sentences will still be written.”
Article written by Sophie Bunn, student at the University of Texas.